Sony Sued Over PlayStation Network Hack

A class action lawsuit charges that Sony failing to protect personal information and credit card numbers of up to 77 million users.

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Sony faces public condemnation as its PlayStation Network (PSN) outage enters its seventh day, combined with a security breach of users' personal information that may have exposed the credit card details of up to 77 million customers.

On Wednesday, Kristopher Johns, 36, of Birmingham, Ala., filed the first class action lawsuit, on behalf of all PSN users, in the U.S. District Court for the Northern District of California. The lawsuit alleges that Sony "failed to encrypt data and establish adequate firewalls to handle a server intrusion contingency, failed to provide prompt and adequate warnings of security breaches, and unreasonably delayed in bringing the PSN service back on line." It also accused Sony of violating the Payment Card Industry (PCI) security standard, which prohibits companies from storing cardholder data.

Sony pulled the plug on PSN and its Qriocity music service on Friday, three days after it discovered "an external intrusion," according to a blog post from Patrick Seybold, Sony's senior director of corporate communications and social media. The outage blocks users from playing online games as well as some users from accessing multiple services, including Netflix and Hulu Plus. At the time, Seybold said that Sony was attempting to resolve the situation quickly.

By Tuesday, Sony said that the PSN outage was continuing while it attempted to address a situation that was worse than it originally suspected. Namely, Sony's forensic investigation had discovered that a hacker had compromised the personal information of up to 77 million users.

In a letter sent to all PSN and Qriocity account holders, Sony said that "although we are still investigating the details of this incident, we believe that an unauthorized person has obtained the following information that you provided: name, address (city, state, zip), country, email address, birth date, PlayStation Network/Qriocity password and login, and handle/PSN online ID." In addition, the attacker may also have stolen users' purchase history, billing address, and password security questions.

Most alarmingly, however, "while there is no evidence at this time that credit card data was taken, we cannot rule out the possibility," said the Sony letter. "Out of an abundance of caution we are advising you that your credit card number (excluding security code) and expiration date may have been obtained."

What should Sony's customers do to protect themselves? "If you have used the same username/e-mail address with the same password in some other service, change the password now. When PSN comes back online, change your password there as well," said Mikko Hypponen, chief research officer at F-Secure, in an email. Security experts also recommend canceling any potentially compromised credit cards.

In response to the breach, Sony said it had engaged a major security firm to investigate the intrusion and that it was going to "strengthen our network infrastructure by re-building our system to provide you with greater protection of your personal information." According to Sony, "our teams are working around the clock on this, and services will be restored as soon as possible."

What exactly might Sony be rebuilding? "Details of the 'rebuild' are not forthcoming so it's hard to identify exactly what they are changing. In my experience with such security issues, however, I would note that complex systems that are built lacking security are often incredibly difficult to debug and patch with security if they aren't built on good foundations," said James Lyne, director of technology strategy at Sophos, in an email interview. "Often, security with such large-scale data processing systems needs to be built into the architecture," and if it isn't, he said, the simplest way to create a secure approach is to simply start from scratch.

On the other hand, "time is of the essence" for Sony, hence "tactical patching in the existing infrastructure--to avoid additional exploits--followed by a complete design review, is a good strategy," he said.

Sony has no doubt started by addressing how a hacker managed to--potentially--steal credit card details for up to 77 million people, which puts it in apparent violation of PCI. Regardless, Lyne said that companies can do better. "The practices required by standards such as PCI are 'decent practices' but I would argue a great deal more could be done to avoid extensive exposure of credit card information," he said. "It's time to apply the lessons learned over the past few years and raise the bar."

Applying lessons learned may not, however, be Sony's strong suit, owing to its reputation for security incidents that spiral into PR disasters, owing to a lack of transparency. Notably, Sony earned mass condemnation--and saw at least one class action lawsuit--in 2005, when it installed a hidden rootkit on users' PCs to block them from copying Sony music CDs. Antivirus firms quickly designated the software, which was extremely difficult to uninstall, as spyware, and set their software to nuke it.

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